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3 years ago

Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products.

Business

1 answer:

Angelina_Jolie [31]3 years ago

4 0

Answer:

Explanation:

JOURNAL

Date Account Title & Explanation Post Debit ($) Credit($)

Ref.

3- May Inventory 16,000

Cash 16,000

(To record the purchase at 8

per $ for 2000 units

5-May Account receivable 12,000

Sales 12,000

(To record the sales on account)

5- May Cost of goods sold 8000

Inventory 8000

(To record Cost of goods sold)

7- May Sales return & allowance 1,200

Account receivable 1,200

(To record the sales return)

7- May Inventory 800

Cost of good sold 800

(To record the cost of inventory

restored to Allied Company)

8- May Sales return allowance 400

Account receivable 400

(To record the credit of $400 given

to Macy company for compensate of

damage)

15- May Cash 10,192

Sales discount 208

Account receivable 10400

(To record the cash received within

discount period)

N:B

From above ; on May 15 ;

We determine the accounts receivable amount after sales return and allowances;

i.e

Account receivable = Sales - Sales return - Compensation Period

= $12,000 -$1,200 - $ 400

= $10,400

The cash discount = Account receivable × 2 %

= $10,400 × 0.02

= $208

The cash received amount = Account receivable × 98%

= $10,400 × 0.98

= $10,192

I hope that helps alot!

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